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Drivers of Production and Efficiency of Onion Cultivation in Bangladesh

ASIF REZA ANIK
Department of Agricultural Economics, Bangabandhu Sheikh Mujibur Rahman Agricultural University (BSMRAU), Gazipur-1706, Bangladesh

MD. ABDUS SALAM
Department of Agricultural Economics, Bangabandhu Sheikh Mujibur Rahman Agricultural University (BSMRAU), Gazipur-1706, Bangladesh

SANZIDUR RAHMAN
School of Geography, Earth and Environmental Sciences, University of Plymouth, PL4 8AA, UK

Abstract/ Executive Summary:

The study identifies the drivers of production and technical efficiency in onion cultivation based on a survey of 300 farmers from three different major onion growing districts in Bangladesh by applying a stochastic production frontier approach. Results reveal that land is the most important driver of production (elasticity value 0.33) followed by labour (0.24) and seed (0.18). Use of modern seed significantly improves production. A constant return to scale exists in onion production. The mean technical efficiency is estimated at 67% implying that output can be increased substantially by 49% by eliminating inefficiencies in production. Extension contact, use of a recommended dose of fertilizers and non-agricultural income significantly improve technical efficiency. Efficiency is significantly higher for owner-operators and diversified farms. Policy implications include investments in extension services and land reform measures to improve land ownership in order to boost onion production in Bangladesh.

Keywords: Onion cultivation, Stochastic production frontier approach, Technical efficiency, Bangladesh

Location: Pabna, Faridpur and Rajshahi district, Bangladesh

Start Date:

End Date:

Program Area: Crop-Soil-Water Management

Commodity: Onion, Modeling

Objectives:

To identifies the drivers of production and technical efficiency in onion cultivation based on a survey of 300 farmers from three different major onion growing districts in Bangladesh by applying a stochastic production frontier approach.

Methodology:

Data and survey: The study is based on cross-sectional data collected from 300 onion growers belonging to six villages in the three major onion growing districts of Bangladesh. A multi-stage sampling technique was employed to locate the districts, then the Upazila (sub-districts), the villages in each sub-district, and finally the sample households. The purposively selected three districts for the study were Pabna, Faridpur and Rajshahi. From each district, the highest onion-producing sub-district, and from each sub-district, top two onion-producing villages were purposively selected. Finally, from each village, 50 onion growers were randomly selected by utilizing the list of onion growers available with the local agricultural extension offices as the sampling frame. The econometric model: To analyze the drivers of production and inefficiency in onion cultivation, we utilize the stochastic production frontier approach which allows joint estimation of the production technology and associated level of technical inefficiency of the producers. The inefficiency variables included in the model are: a satisfaction index for extension service, where a higher value indicates higher level of satisfaction; dummy variable representing access to formal agricultural credit facilities (1 for farmers with access to credit, 0 otherwise); annual off-farm income of the household (BDT); Herfi ndahl index of crop diversification, the value of the index is from 0 to 1 and the higher value represents specialization; dummy variable for farmers using recommended fertilizer dose (1 for farmers using recommended dose, 0 otherwise); a dummy for Pabna district (1 for farmers in Pabna district, 0 otherwise); and a dummy variable for Rajshahi district (1 for farmers in Rajshahi district, 0 otherwise).

Source of Information: Bulgarian Journal of Agricultural Science, 23 (No 1) 2017, 34–41

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The study attempts to identify the drivers of production and technical efficiency in onion cultivation at the farm level in Bangladesh using a stochastic production frontier approach. Results reveal that land, labour, seed and modern variety are the main drivers of onion production. Constant returns to scale exist in onion production. A substantial level of inefficiency exists in onion production which can be eliminated to boost production. The efficiency drivers are crop diversification, extension services, cultivating in own land, earning from off-farm activities and using recommended doses of fertilizers. Based on these findings, the following policy interventions are recommended. Investment in extension services is of paramount importance. The Department of Agricultural Extension (DAE) has a key role in popularizing modern onion varieties. The extension agents have to orient the farmers to improved cultivation practices including a selection of improved onion varieties and application of recommended doses for different inputs. As farm-level efficiency varies across locations, extension programmes should be designed by prioritizing areas with lower efficiency (e.g., Rajshahi and Pabna). Since a number of non-governmental organisation (NGOs) operating in Bangladesh promotes crop diversification and kitchen gardening, they can also potentially contribute to disseminate information on modern technology adoption and improve productivity and efficiency. Another important intervention is land reform programme primarily aimed at improving land ownership of individual farms which will require a strong political commitment to address the issue of absentee landlordism, effective redistribution of the ‘khasland’ (state-owned land) amongst landless farmers, enforcement of the ceiling land ownership of 8.5 ha per household which was established since 1984 (CARE, 2003) and facilitation of the smooth operation of the agricultural land market.

Knowledge Management: Journal